Dennis Herrera proposes SF office of innovation

Mayoral candidate Herrera envisions office of new ideas

Published 3:20 pm, Tuesday, September 13, 2011

Photo: Brant Ward, The Chronicle

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Dennis Herrera (right) makes a point to Yelp CEO Jeremy Stoppelman at the company headquarters. San Francisco City Attorney and mayoral candidate Dennis Herrera visited Yelp headquarters on Mission Street Monday September 12, 2011. less

Dennis Herrera (right) makes a point to Yelp CEO Jeremy Stoppelman at the company headquarters. San Francisco City Attorney and mayoral candidate Dennis Herrera visited Yelp headquarters on Mission Street ... more

Photo: Brant Ward, The Chronicle

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Dennis Herrera (right) talked with Yelp CEO Jeremy Stoppelman at the company headquarters. San Francisco City Attorney and mayoral candidate Dennis Herrera visited Yelp headquarters on Mission Street Monday September 12, 2011. less

-- Technology has emerged as a central issue in San Francisco's mayoral race. And no wonder: It's the sector producing jobs and filling up real estate, while providing products and services that connect, entertain or enlighten many residents.

But technology is also the sector generating many of the divisive policy issues of the day, like cell-phone-tower construction, AT&T's recently approved utility boxes, and the tax breaks being granted to certain young businesses. I recently sat down with several top mayoral candidates to discuss these and other technology issues. The interview series continues with City Attorney Dennis Herrera.

If elected mayor, Herrera says he would immediately establish an office of innovation and hire a chief digital officer. The department would be assigned to find new ways to use social media and other technology tools to improve local government's ability to interact with citizens.

Herrera has also made reforming the city's payroll tax a central plank of his economic plan, an issue of great concern to technology companies, as well as other large employers.

The tax kicks in at 1.5 percent of payroll once a company's total goes above $250,000 and applies to the gains from stock options exercised after an initial public offering - a provision that adds up to big obligations for hot IPOs. In recent months, fast-growing companies like Twitter, Yelp and Zynga successfully pushed for various narrow exemptions to the tax.

Herrera discusses these issues in greater depth in the interview that follows. His answers have been edited for space and clarity.

Q:San Francisco already has a department of technology. What's the importance of an office of innovation?

A: The technology office is just designed to keep the hardware running in city government. It does nothing to improve interaction with the public.

People are cynical about government, politics and politicians. In order to have a government that inspires people, you need two things. One is results, and No. 2 is transparency. People need to believe that they're being listened to and have a say. We're in a particularly challenging time right now, as we transition from systems in place built for a different age.

But the whole Government 2.0 movement is about making how the government interacts with the public a priority. We need to promote civic involvement in real time. Ultimately, we're going to get better information and involvement. But that also helps promote the legitimacy of what it is we're doing as a government each and every day.

Q:Technology is obviously a rare bright spot in this economy, creating jobs and real estate demand. How do you plan to keep the engine humming?

A: We're seeing a re-urbanization of America. People want to be back in cities, and there are going to be a number of gateway cities that will define international competition going forward.

San Francisco has a unique opportunity to be a model for what a 21st century city will be, based on its educated workforce, location on the Pacific Rim and geographic density.

All of those things play to our advantage. They're reasons that Yelp, Zynga and Twitter want to be in San Francisco. They want to be where their workforce wants to be. Creative people want to be back in cities, so we have a great opportunity to make the right choices.

Q:Choices like what?

A: On day one as mayor, I'd call for a tax summit to redo the city's payroll tax. We're the only city in California that has a payroll tax, and only 8,000 of our 80,000 businesses pay it.

We need a tax system more equitable to small, medium and large businesses and one that creates a more predictable revenue stream to the city.

Q:Ultimately, doesn't this mean lowering business taxes - and doesn't that create problems for a city that struggles to balance its budget every year?

A: I don't believe that changing the payroll tax means you'll see a diminishment in the tax base. We just have to create a system that is fair and equitable and helps create economic opportunity and expand the economic pie, that also provides us with more certainty about the revenue we receive.

The focus of the folks that I would convene for a tax summit will be to come up with a new tax system that balanced those goals.

Q:The very success of the tech industry locally has created some problems of its own, much as it did during the dot-com boom of the late 1990s. We've reported on the growing difficulties people not earning tech wages face in finding places to live in the city. How can the city address those challenges?

A: We have to understand that in order to grow our economy here, we have to be as broad based as we can possibly be. We have to create economic opportunities at all levels of the socioeconomic scale.

We need to ensure we're growing other industries, like health care, industrial employment opportunities and small business.

Q:Those are worthy goals, but my question went more to: How can we address the issue of affordable housing here for non-tech workers?

A: You need to ensure you're providing affordable housing for all levels. We have to ensure we have smart growth along transit corridors that provide people with green, mid-range home-buying opportunities, workforce housing. And we have to ensure we're finding creative ways to build or retain rental stock.

Q:BART's recent decision to shut down cell-phone service in anticipation of a protest has generated widespread criticism by free-speech advocates. What was your take on that decision?

A: That was an incredibly misguided policy choice. Believe me, I understand they want to do what they can to protect public safety, but you don't do something like that. I think it was a constitutional infringement, No. 1. And from a public safety perspective, I think they cause more problems than what they were trying to protect against.

Q:In response, hackers breached an agency-affiliated website and a BART police officers site. Does that raise broader questions in your mind about the state of security among city agencies? Is that something you would look at?

A: I think we need to be vigilant. We've seen other instances at the federal and local level where there has been hacking and attempted hacking.

We need to make sure we're staying on top of that as a city, to be proactive when it comes to making sure our sites are secure. We have a lot of sensitive personal information in the city's data systems. We owe it to the public to be as protective of that information as we can.

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